Financial Analysis of Nestle
Nestle touches the lives of millions of people everyday and is amongst the most trusted companies in India. It is an integral part of the social fabric and focused on understanding the changing lifestyle of India, to anticipate consumer needs. Nestle brands are leaders in India because the company has continuously tracked consumer needs and provided relevant products whenever, wherever and however consumers may need them. HISTORY Nestle was founded in 1867 in Geneva, Switzerland by Henri Nestle. Nestle’s first product was “Farine Lactee Nestle”, an infant cereal.
In 1905, Nestle acquired the Anglo-Swiss Condensed Milk Company. Nestle’s relationship with India started 1912, when it began trading as The Nestle Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. The company now has a strong presence worldwide. Nestle is the world’s foremost Nutrition, Health and Wellness company. Nestle India Limited is the Indian arm of Nestle SA,which holds a 51% stake in the company.
Depreciation is the reduction in the cost of an asset used for business purposes during certain amount of time due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion, inadequacy, rot, rust, decay or other such factors. Depreciation is provided as per the straight-line method at rates provided in Schedule XIV to the Companies Act, 1956, except for the following classes of fixed assets, where the useful life has been estimated as under: – Information technology equipment: 3 years Furniture and fixtures and Vehicles: 5 years
Leasehold land and improvements: Lease period Management information systems (Intangible fixed asset) : 5 years For example, In lease hold the previous year’s balance was Rs. 94,657 thousand and the addition purchase was of Rs. 338 thousand which amounted to a total of Rs. 94,995 for the year 2008. The depreciation for the year 2007 and 2008 amounted to Rs. 2,961 thousand. Hence, the value of lease hold on 31st December, 2008 is 94,995 – 2,961= 92,034 thousands. Freehold Land Real property held under fee simple absolute in possession is a freehold land.
Leasehold Land Real property held by a tenant (lessee) under a lease for a fixed term, after which it returns to the freehold owner is a leasehold land. Building Permanent or temporary structure enclosed within exterior walls and a roof, and including all attached apparatus, equipment, and fixtures that cannot be removed without cutting into ceiling, floors, or walls is a building. Railway siding Short-distance railroad track serving a factory or warehouse, and connected to the main track via a switch. Furniture and Fixtures
Items considered as personal property unless they are affixed to the real property, such as chairs, desks, filing cabinets, computer equipment, copier, fax machine, telephone equipment are called as furniture and fixture. Information Technology Equipment IT equipments are a set of tools, processes, and methodologies (such as coding/programming, data communications, data conversion, storage and retrieval, systems analysis and design, systems control) and associated equipment employed to collect, process, and present information. In broad terms, IT also includes office automation, multimedia, and telecommunications.